The hospitality industry has defended surcharges on weekends and public holidays to help businesses cope with spiralling costs.
In 2025, one in 11 hospitality businesses, a record 9.3 per cent, closed in the 12 months to February, CreditorWatch CreditorWatch data shows, as higher wages, energy and insurance costs meet a lower discretionary spend as consumers battle rising costs.
At the Mitta Mitta Brewing Company - a brewery, bar and restaurant with about 13 staff in the foothills of the Snowy Mountains in Victoria - a surcharge keeps the doors open on public holidays, when penalty rates push wages up to 250 per cent above base levels.
"It's hard work being that busy on these weekends and then to find that you're earning nothing for it. It's just too much," co-founder Alec Pennington told AAP.
"That's why places don't open."
The two couples who started the family business also work more than full-time hours, 48 weeks a year, handling design, promotion, cooking and front of house. But they pay themselves significantly less than staff to keep the business ahead of costs.
"We're a small business. The only way we can survive is by paying ourselves less than our employees," Mr Pennington said.
"I'd say that's pretty standard across most restaurants."
While the brewery had been slow off the mark to implement its public holiday-only surcharge, the 10 per cent duty hadn't sent customers running and Easter weekend was fully booked.
"The surcharge has been good for us. It's something," Mr Pennington said.
"And ... the customers have actually come to terms with it already because it's so widespread."
Surcharges are back in the headlines after Anthony Albanese said he received penalty rates as a student four decades ago when he was a dish washer at Pancakes on the Rocks in Sydney.
The prime minister said the market was choosing to do that.
Catering HQ group managing director Steve Sidd doesn't charge a surcharge at the firm's 26 dining venues and more than 40 event spaces across NSW, but would prefer not to pay penalty rates.
"We don't want to penalise our customers, to avoid them coming to our venues and saying that they get hit with public holiday surcharge," Mr Sidd told AAP.
"We'll be lucky to even break even on those public holidays, we just haemorrhage with it."
Catering HQ has 330 staff.
"I'm not opposed to it (surcharges), but to be honest, a lot of these venues, they charge 10 per cent or 15 per cent. But that doesn't even cover the increased wage costs," Mr Sidd said.
"The corporate world is a Monday to Friday week but with hospitality, Friday, Saturdays, Sundays is 70 per cent of our turnover. So why should hospitality be penalised on the weekends for Saturday and Sunday penalty rates?"
For small business operators penalty rates were "an extraordinary burden", Restaurant and Catering Association president John Hart said.
"Surcharges are a transparent, lawful and fair practice that enables businesses to compensate for the additional costs of trading," he said.
"Without them, the viability of many hospitality businesses would be at risk on days when customers want to eat out."
Another surcharge, on credit and debit card payments, is being closely watched by the Australian Competition and Consumer Commission.
"Businesses need to ensure their customers know about any card payment surcharges up-front, and that they are only charging what it costs them to accept those card payments," ACCC Deputy Chair Mick Keogh said.
The ACCC will check business compliance and would take enforcement action if necessary, the regulator said.
The update came as Reserve Bank finalises a review into retail payments, including credit card transactions.
Australian Restaurant & Cafe Association said merchant fees and other costs of doing business were weighing heavily on its members.
"Surcharging enables small businesses to recover some costs associated with card acceptance, allowing them to operate more sustainably," the association wrote, and added a surcharge ban could lead to higher menu prices.
